Thanks a lot and sorry for the inconvenience with the size of the figure.I have a confusion about how the transistor performing the switching purpose and giving the oscillation?
....switching purpose? Please do not think only of switching operations of a transistor. Such a transistor can be - and is (!) - used as a linear amplifier. And that is the task of the transistor in this circuit.
Question: Do you know the general oscillation condition (Barkhausen?). Otherwise you cannot understand why a circuit with feedback can oscillate - under certain conditions.
In short: There must be an amplifier and a feedback loop with a phase shift of 360 deg for one single frequency. This can be accomplished using a transistor with a filter in the feedback loop.
There are several alternatives to do this.
One of these is the HARTLEY principle: As you know there is a phase shift of 180 deg between base and collector.
The remaining 180 deg (at one single frequency) are caused by a 3rd-order high-pass filter consisting of two inductances and one capacitor.
Please note that
* this filter is fed by a current source (transistor), and
* the 12 V supply provides a signal ground.
Thus you have a classical L-C-L high pass PI-filter in the feedback loop.